Total and Permanent Disability Discharge Reporting

[Anonymous]

I am current on my student loans with Nelnet, but my medical condition has worsened (it did not exist when loans were made) and I will not be employed much longer.  How should a student loan be reported for total and permanent disability discharge?

I read on another board that it was reported as a default.

[Anonymous]

I found this on the US Dept of Education's website:

http://studentaid.ed.gov/PORTALSWebApp/students/english/discharges.jsp

Total and Permanent Disability Discharge

Total and permanent disability is the inability to work and earn money because of an injury or illness that is expected to continue indefinitely or to result in death.

You must submit a physician’s certification of total and permanent disability. The physician must certify that you are 100 percent disabled according to the definition of disability above.

As of July 1, 2002, if you are determined to be totally and permanently disabled, you will have your loan placed in a conditional discharge period for three years from the date you became totally and permanently disabled. During this period, you don't have to pay principal or interest. If you continue to meet the total-and-permanent disability requirements during, and at the end of, the three-year conditional period, your loan will be canceled. If you don't continue to meet the cancellation requirements, you must resume payment. For more information on qualifying for this discharge, contact your loan holder.

[me again]:  I think this is really hard to get even with the physician's certification.  Like harder than Social Security or VA benefits.  And I have a feeling that this applies only to federal loans.  Private loans likely have an even higher standard to meet permanent and total disability.  And the bottom line is that the loan holder is who decides if the disability is permanent and total with no appeal to DOE . . .

[LynnInMN]

Let's put it this  way...it  is  extremely  difficult  to have  a federal loan  cancelled for permanent disability.  (There is  no cancellation for private loans  at all.)

You  basically  have to  have  a  condition that is  untreatable or unrepairable.    When I was  first  collecting,  being HIV positive  was grounds for  loan cancellation.  By the time I  left,   so  many  drug  therapies  were available  that you could  not  get a cancellation until you were full blown  AIDS  entering into  hospice.   SSDI  will pay  out  on many disabilities  but  the  DOE  has  a way  higher standard.    You  can  get SSI for blindness,  deafness,  mental disorders, cancer,   back injuries,  being  in a wheelchair...I  have read some pretty  far out  examples  of what  SSDI is paying out  on.  But none  of these qualify under  DOE  standards.  Basically  if  there is a  drug  therapy  or treatment  that can  or  could  get  you  back into othe  workforce,  the loan will  not be cancelled.  And  it  doesnt have to be the same  line of work...it  a trucker lost  a leg and  could  not drive,  he would be  expected to  be retrained for a desk job. 

[n2win]

Student Loans discharged due to total and permanent disability (after 3 years of disability, and not working, and with doctors verification) report as a positive TL, "pays account as agreed".  Also, IIRC, they ALL are cancelled, it is determined by DOE.  hth

eta links

http://www.ombudsman.ed.gov/cancellation.html

the doctor form

http://www.ed.gov/offices/OSFAP/DCS/forms/disable.pdf

Message Edited by n2win on 08-19-2008 03:48 PM

[Anonymous]

Thanks for the information about the reporting of discharged student loans.

The VA has already rated me 100 percent total and permanent due to seriousness of illness and my age.  My physician asked me why I am still working based on the seriousness of my illness and she advised me to apply for disability based on my diagnosis. I never thought of applying for disability until my physician suggested it. 

I also do not have any private student loans.

Message Edited by ana on 08-19-2008 05:57 PM